What Is The Cost Of Fraud Prevention In Healthcare?

This post was originally featured on EMRandHIPAA.

Among other things, credit card companies prevent enormous volumes of fraud. In exchange for their services, credit card companies typically charge about 2.5% of merchant revenue. The cost of fraud prevention for most merchants is no more than 2.5% of revenues.

But healthcare is rarely paid for by credit card. The vast majority of payments are directly transferred from payers to providers.

So what is the cost of fraud prevention in healthcare?

If providers were angels and never frauded payers, then the entire claims system would have no reason to exist. In this utopian world, providers would simply bill payers accurately and payers would gladly pay knowing that the claims were honest.

But that’s unrealistic. Payers are extremely skeptical of providers. There is an enormous amount of friction between payers and providers to ensure that providers aren’t overpaid: the technology vendors at every layer of the stack (provider, clearing house, payer), the billers, coders, claims departments, prior authorization departments, insurance agents, AR departments, etc. All of these people, processes, and technologies exist to ensure that providers aren’t overpaid.

Although I cannot find any explicit numbers, it’s not unreasonable that the sheer administrative costs of the claim system is greater than 10% of all healthcare costs.

In addition to compliance costs, actual Medicare Fraud is estimated at about $50B, which is about 9% of all Medicare payments.

The takeaway of the story is that providers can’t seem to stop frauding Medicare. The irony is that physicians – who are generally respected by the public – are those whom the system works most diligently to ensure aren’t overpaid.

Welcome To Telehealth Through Google Contacts

A few months ago, Google announced that they are developing contact lenses that can measure glucose levels present in one's tears. For diabetics accustomed to poking themselves multiple times per days, these contacts present an incredible opportunity to improve quality of life.

Now, Google has filed a patent for what I'll call "Google Contacts," which feature tiny cameras embedded in the contact lenses. 

At Pristine, the moment we saw Google Contacts, we began dreaming. Compared to a contact lens, Glass is a primitive tool. Because the screen is removed from one's direct line of site, Glass isn't a practical augmented reality device. Rather, Glass is just a passive device, described by Google as: "there when you need it, and out of sight when you don't."

Google Contacts will open an incredible wave of opportunities in augmented reality and human-computer interaction. With the ability to layer or remove any data from one's visual field, the lines between reality and virtual reality begin to blur.

Google Contacts will also create incredible new opportunities in telehealth. By embedding cameras in contact lenses, Google Contacts will overcome one of the greatest limitations of Glass: the fact that the camera can't mirror movements of the eye. 

Imagine an emergency room physician or nurse, sending the visual product of an exam to a neurologist or other specialists for an immediate consult. The specialist could "draw" on the screen on which s/he is viewing the video stream, and the person wearing the contacts could literally see what the consultant is drawing. The opportunities for telepresence and collaboration are incredible.

Or imagine an emergency responder who, by closely examining an injured or ill person, will automatically beam back detailed visual information to a physician back at the hospital. Or a military medic, beaming back details of an injured soldier from the battlefield to doc based in the rear.

Coupled with breakthroughs in augmented reality, the future for Google Contacts looks incredibly promising.

Why Is It So Difficult To Reduce The Cost Of Care?

This post was originally featured on EMRandHIPAA.

By refusing to pay for readmissions within 30 days of discharge from a hospital, Medicare has sent a strong message across the healthcare industry: < 30 day readmissions should be avoided at all costs. As a result, providers and vendors are doing everything in their power to avoid < 30 day readmissions.

This seems like a simple way to reduce costs, right? Well, not quite…

The vast majority of costs of care delivery are fixed: capital expenditures, facilities and diagnostics, 24/7 staffing, administrative overhead, etc. In other words, it’s extremely expensive just to “keep the lights on.” There are some variable costs in healthcare delivery – such as medications and unnecessary tests – but the marginal costs of diagnostics and treatments are small relative to the enormous fixed costs of delivering care.

Thus, Medicare’s < 30 day readmission policy doesn’t really address the fundamental cost problem in healthcare. If costs were linearly bound by resource utilization, than reducing readmissions (and thus utilization) should lead to meaningful cost reduction. But given the reality of enormous fixed costs, it’s extremely difficult to move down the cost curve. To visualize:

Medicare’s < 30 day readmission policy is a bandaid – not a cure – to the underlying cost problem. The policy, however, reduces Medicare’s outlays to providers. Rather than reduce (or expand, depending on your point of view) the size of the pie, Medicare has simply dictated that it will keep a larger share of the metaphorical pie for itself. Medicare is simply squeezing providers. One could argue that providers are bloated and that Medicare needs to squeeze providers to drive down costs. But this is intrinsically a superficial strategy, not a strategy that addresses the underlying cost problems in healthcare delivery.

So how can we actually address the fixed-cost problem of healthcare? Please leave a comment. Input is welcome.

Why Telehealth?

Telehealth, aka telemedicine, is one of the most important trends shaping the future of healthcare. It is one of the most effective and direct ways to achieve the triple aim of cost, quality, and access.

This blog post will attempt to explain the underlying problems in the healthcare delivery system that telehealth addresses. As a result of solving these problems, telehealth creates value along all dimensions of the triple aim.

Healthcare delivery is fragmented across medical discipline, location, and time. In a given location, it can be difficult to get the right specialist to a patient in need. Specialists are busy and have full schedules in their clinics everyday. Specialists don't want to leave their clinics and patients don't want to go to the specialists' clinics. The cost of travel - time, cost, and distance - is significant for all parties. Neither party wants to travel to see the other.

Within a given location, there is almost always significant supply and demand imbalances for healthcare services. Telemedicine addresses the supply and demand problem by making location irrelevant. In a world in which telehealth is the norm instead of the exception, a patient in need should be able to access a qualified specialist from a much larger pool than in the analog era of healthcare delivery. Solving the access problem by increasing supply in every location also addresses cost and quality problems. Telemedicine addresses cost problems by forcing providers to compete to provide the best care at the lowest price. Telemedicine addresses quality problems by reducing the time to care, which can meaningfully impact outcomes.

At Pristine, we're proud to pioneer a new avenue of telehealth. Our telehealth solutions are by far the lightest-weight and easiest to use in both physical and virtual terms. Are clients don't need any physical infrastructure or local servers at their local sites. In fact, our clients don't even need to install software on their Macs and PCs. Everything runs natively in the web browser in beautiful HD.

Our clients - UC Irvine, Brown, and soon to be several more - are using our solutions every day to address the supply-demand challenge of healthcare delivery, and as a result, are working towards the triple aim.

Onwards and upwards!

Big Brother or Best Friend?

This post was originally featured on EMRandHIPAA.

The premise of clinical decision support (CDS) is simple and powerful: humans can’t remember everything, so enter data into a computer and let the computer render judgement. So long as the data is accurate and the rules in the computer are valid, the computer will be correct the vast majority of the time.

CDS is commonly implemented in computerized provider order entry (CPOE) systems across most order types – labs, drugs, radiology, and more. A simple example: most pediatric drugs require weight-based dosing. When physicians order drugs for pediatric patients using CPOE, the computer should validate the dose of the drug against the patient’s weight to ensure the dose is in the acceptable range. Given that the computer has all of the information necessary to calculate acceptable dose ranges, and the fact that it’s easy to accidently enter the wrong dose into the computer, CDS at the point of ordering delivers clear benefits.

The general notion of CDS – checking to make sure things are being done correctly – is the same fundamental principle behind checklists. In The Checklist Manifesto, Dr. Atul Gawande successfully argues that the challenge in medicine today is not in ignorance, but in execution. Checklists (whether paper or digital) and CDS are realizations of that reality.

CDS in CPOE works because physicians need to enter orders to do their job. But checklists aren’t as fundamentally necessary for any given procedure or action. The checklist can be skipped, and the provider can perform the procedure at hand. Thus, the fundamental problem with checklists are that they insert a layer of friction into workflows: running through the checklist. If checklists could be implemented seamlessly without introducing any additional workflow friction, they would be more widely adopted and adhered to. The basic problem is that people don’t want to go back to the same repetitive formula for tasks they feel comfortable performing. Given the tradeoff between patient safety and efficiency, checklists have only been seriously discussed in high acuity, high risk settings such as surgery and ICUs. It’s simply not practical to implement checklists for low risk procedures. But even in high acuity environments, many organizations continue to struggle implementing checklists.

So…. what if we could make checklists seamless? How could that even be done?

Looking at CPOE CDS as a foundation, there are two fundamental challenges: collecting data, and checking against rules.

Computers can already access EMRs to retrieve all sorts of information about the patient. But computers don’t yet have any ability to collect data about what providers are and aren’t physically doing at the point of are. Without knowing what’s physically happening, computers can’t present alerts based on skipped or incorrect steps of the checklist. The solution would likely be based on a Kinect-like system that can detect movements and actions. Once the computer knows what’s going on, it can cross reference what’s happening against what’s supposed to happen given the context of care delivery and issue alerts accordingly.

What’s described above is an extremely ambitious technical undertaking. It will take many years to get there. There are already a number of companies trying to addressing this in primitive forms: SwipeSense detects if providers clean their hands before seeing patients, and the CHARM system uses Kinect to detect hand movements and ensure surgeries are performed correctly.

These early examples are a harbinger of what’s to come. If preventable mistakes are the biggest killer within hospitals, hospitals need to implement systems to identify and prevent errors before they happen.

Let’s assume that the tech evolves for an omniscient benevolent computer that detects errors and issues warnings. Although this is clearly desirable for patients, what does this mean for providers? Will they become slaves to the computer? Providers already face challenges with CPOE alert fatigue. Just imagine do-anything alert fatigue.

There is an art to telling people that they’re wrong. In order to successfully prevent errors, computers will need to learn that art. Additionally, there must be a cultural shift to support the fact that when the computer speaks up, providers should listen. Many hospitals still struggle today with implementing checklists because of cultural issues. There will need to be a similar cultural shift to enable passive omniscient computers to identify errors and warn providers.

I’m not aware of any omniscient computers that watch people all day and warn them that they’re about to make a mistake. There could be such software for workers in nuclear power plants or other critical jobs in which the cost of being wrong is devastating. If you know of any such software, please leave a comment.